The study of Economics is just like talking to someone you like.
Whenever and wherever you, or any person for that matter, talk to a person that you like, there's always a central problem that he or she isn't free to talk to you. We call this the central problem of scarcity. The problems stems from the fact that you want to keep talking to this individual for an unlimited period of time, but this person has limited time to reply you and start a decent conversation. When faced with scarcity of time, every second the conversing party spends has an opportunity cost, which means that for every second spent talking to you, this individual has less time to do other things (such as doing homework, playing ball, doing filing etc.) As such, this can be known as having unlimited wants to converse, but limited time for conversation.
Before we can cover this issue of scarcity, we must first ask ourselves what constitutes an intelligible conversation. I believe that before we start a conversation with whichever individual, we must first ask ourselves four fundamental questions.
What to talk about? (and conversely, what not to talk about)
How to talk? (SMS? MSN? Phone?)
How much to talk? (Ah, this has implications and it is known commonly as the law of diminishing marginal conversation. Another day on this.)
For whom to talk about? (Talk about yourself? Or about this individual?)
Aside from aiming to find answers to these questions, we must also aim to achieve three main criterias. These are known as:
- Equity
- Productive conversationing (the conversation covers as much content in as little time as possible)
- Allocative conversationing (limited time of the person you like talking to is allocated to you according to his/her wishes)
Taking these factors into consideration, we can now begin a conversation intelligibly (or non-intelligibly for some). The aspiring conversationalist would now have to make conversation choices based on these four fundamental linguistic guidelines. Conversationalists throughout history have tried out many different methods of communicating with the people they like, with every method subsequently leading to different outcomes. However, for the purpose of discussion, we shall only focus on two main kinds of conversationalists.
The first kind of conversationalist is known as the centrally-backed conversationalist (or bloody tyrant). This type of conversationalist makes all the choices of what to talk about, how to talk, how much to talk, and for whom to talk about. Typically, conversationalists of this sort dictates every one of these criterias and controls the direction of the whole conversation. Lecturers of my school, for example, obviously love talking to us, especially to me. As such they tyranically, despotically and wickedly squeezed themselves into my timetable hoping to converse intelligibly with me. These lecturers decide to talk about nefarious topics like Physics, Chemistry, Maths and Econs by the means of a propped-up microphone from behind a frilly desk. They talk generally about themselves and the topics they love with no regard of whether the people they like, in this case me, are falling asleep and go on mercilessly for a whole damn hour. Undoubtedly, conversationalists of this kind are able to achieve equity (everyone they're talking to falls asleep, no one is listening) but this mode of conversationalist is not recommended as it leads to the people you like talking to ditching you and pursuing other potential opportunity costs instead (such as going library to sleep or bringing laptop to play nerd games like FF8).
The other kind of conversationalist is the free conversation conversationalist. This friendly way of conversing is the most widely method of conversing. Free conversation conversationalists let both the conversationalist and the conversed to freely decide what to talk about, how to talk, how much to talk and for whom to talk about. This way of conversing is guided by the invisible hand theory. During the course of conversation, two possible conditions ensue. The first - the conversationalist or the conversed talk much more than the other party. In this case, the conversation is lopsided and the invisible hand is unhappy.
By the invisible hand theory, the invisible hand will become visible and show an indication of displeasure:
The other possible scenario that can take place is when the conversationalist and the conversed alike have equal opportuinities at talking and talk freely about anything under the sun. In this scenario, by the invisible hand theory, the invisible hand will become visible again and show a different indication this time of its approval and the conversation clears:
The conversation is said to have reached equilibrium.
However, the downside to this mode of conversing is that we assume both parties to be perfectly conversationable and that there is no conversation failures (more on this another day). In the even where the above criterions are not satisfied, there would be severe repurcussions (apart from the fiery invisible hand sign's wrath) and intervention by a third party would be required.
No matter what approaches we undertake as aspiring conversationalists, we must always consider the fact that the conversed has scarcity of time. With this in mind, we must aim to satisfy all three forms of equity, productive and allocative conversationing.
Ah dammit I must have been really bored.
